INSOLVENCY AND BANKRUPTCY LAW
The law of insolvency and bankruptcy came in force on 5, May 2016 by notifying about this law in "the gazette of India" and it was introduced on 21 December 2015 by the finance minister late Arun Jaitley in Lok Sabha for the benefit of the businessman and different firm in our country. The main motive of this law was that the government and our law system can provide us a system where small investors, firm holders, a businessman can feel safe, and they can make a profit without any fear. The first insolvency matter was raised by the national company law tribunal (NCLT) as in the case of synergies dooray automotive limited on 14 August 2017. The company submitted there to file for the insolvency on 23 January 2017. Finally on fourteen August 2017, the order appeared on the national company law assembly web site. It provides for a restricted time to technique and resolve conditions.The insolvency and bankruptcy code contain 255 sections and 11 schedules.
There are four main features of insolvency and bankruptcy law which are insolvency resolution, insolvency regulator, insolvency professionals, bankruptcy, and insolvency adjudicator. The first one is insolvency resolution is that it separates the power of the individual to a group and also maximum time to any person in the case of insolvency. It also set different rule for the cooperate to a private firm. The second one is the insolvency regulator which tells us about the preceding in the whole country in the conduct of insolvency and bankruptcy law. This board contains 10 members, our finance and law representatives, and the reserve bank of India. The third feature is insolvency professionals which tell us about the management done by the higher authorities such as licensed professionals in the process of insolvency management. The fourth feature is bankruptcy and insolvency adjudicator which separates two tribunals to take proper decisions in different cases. Law is different in the case of a cooperative firm, private firm, or a company.
Bankruptcy and incolvency code helps mainly four group of society which consist individuals business man, partnership firms, limited partnership firms and companies. This law doesnot effect any non profit bodies. This law effects the liquidation, insolvency, and bankruptcy of any firm,comapany etc. insolvency doesnot consist bankruptcy as the bankruptcy is treated as the legal condition. Many necesssary changes will be done in insolvency and bankruptcy law according to the need of the investers.
The main Key Issues and Analysis is that the rationale for classifying allottees for the real estate project work as financial creditors may be questioned in many different cases and situations. As well as, The Ordinance mainly not clarify whether allottees are secured as well as it also not clear the unsecured financial creditors. In the case where there are no allottees and they don't have a clear status, in the case when receiving dues from the insolvency proceedings then there may be uncertainty about their priority. The Bill tells us about the Insolvency and Bankruptcy Code, 2016 to explain to us about the allottees in a real estate project that should be treated and finalized as the financial creditors. The decisions which were taken by the committee of creditors as the voting threshold for the main purpose of the routine have been reduced from 75% to 51%. There was also a reduction of up to 66% in certain key decisions. The Bill also allows us the withdrawal of a resolution application and then submitted to the NCLT under the bankruptcy and insolvency Code. 90% decision was approved and taken by the committee of creditors.
So as a conclusion, insolvency and bankruptcy were introduced. As a result many foreign investors are now beginning to seek India for the legible place for investment. The main reason for this is that it minimizes the rise of the investor in the future which attracts foreign investors in India. The other reason is that now The foreign investors can properly understand the flexible existing strategy and they become familiar with the policies and codes in India. There are also many reasons like it will create More accentuation which helps in the success of the small businessman and the traders in all over the nation and Even when a company and the businessman or any trader goes insolvent or face any problem same like that in that case, the insolvency and bankruptcy code is a great way for maximizing asset's values. This is the way to increase the investors in our nation and maximize the profit. However, it helps in the growth of the nation and also provides the best ways to improve our financial condition and also support our national finance system.